Torgeir Aarvaag Stokke, Jon Erik Dlvik and Kristine Nergaard

Industrial relations in Norway

Torgeir Aarvaag Stokke, Jon Erik Dlvik and Kristine Nergaard

Industrial relations in Norway

Fafo

 Fafo Institute for Applied Social Science 1999 ISBN 82-7422-238-5 The first part is reprinted from Anthony Ferner & Richard Hyman (eds.) Changing Industrial Relations in Europe, with permission from Blackwell Publishers 1998 Cover page: Jon S. Lahlum Printed in Norway by: Centraltrykkeriet AS

Contents

Preface .................................................................................................. 5 Part 1 Norway: The Revival of Centralized Concertation ............................ 7 Jon Erik Dlvik and Torgeir Aarvaag Stokke Introduction ......................................................................................... 8 Historical Background and Economic-Political Overview ................. 9 The Norwegian System of Industrial Relations .............................. 12 Employer Organizations .............................................................................. 12 Trade Unions ................................................................................................ 14 Regulatory Framework of Collective Bargaining ....................................... 16 The Institutional Embeddedness of Collective Bargaining ........................ 17 Collective Bargaining in Transition Recent Developements ....... 20 From Crisis to Solidarity Pact The Revival of Concertation ..................... 21 The 'Solidarity Alternative' .......................................................................... 22 The 1996 Pay Round The Crumbling of Solidaristic Concertation? ........ 24 The EU and European Labour Regulations ................................................. 25 A Changing Industrial Relations Agenda .................................................... 26 Conclusion Continuity and Change in Norwegian Industrial Relations ....................................................... 27 Abbreviations ............................................................................................... 32 Notes ............................................................................................................. 32 References and Further Reading ................................................................. 32

Part 2 Collective bargaining in Norway 199798 ....................................... 37 Kristine Nergaard and Torgeir Aarvaag Stokke 1 General background information ................................................. 39 1.1 The Solidarity Alternative ...................................................................... 39 1.2 Change of government autumn 1997 .................................................. 39 1.3 Steady improvements in Norwegian economy ..................................... 40 1.4 Union demands, employers attitudes and the role of the government 41 2 Collective bargaining in 1997 ........................................................ 43 2.1 The 1997 wage negotiations ................................................................. 43 2.2 New basic agreements ........................................................................... 44 2.3 Split in AF and establishment of a new employee confederation ...... 46 2.4 Committee proposal on a further education and training reform ..... 47 3 Wages and purchasing power 1997 .............................................. 48 3.1 Development in wages .......................................................................... 48 3.2 Cost of living .......................................................................................... 50 4 Other issues .................................................................................... 51 4.1 Working time developments ................................................................. 51 4.2 Europeanisation of collective bargaining ............................................. 51 4.3 Level of wage determination ................................................................ 52 4.4 The debate on flexibility ....................................................................... 53 4.5 Gender issues .......................................................................................... 54 5 Industrial disputes in the 1990s .................................................... 55 5.1 Legal background .................................................................................. 55 5.2 The level of industrial disputes ............................................................. 55 5.3 New strategies ........................................................................................ 58 5.4 European impact of national strikes ..................................................... 59 5.5 The current debate ................................................................................ 59 6 The bargaining rounds in 1998 ...................................................... 61 6.1 Background ............................................................................................ 61 6.2 Confederation level negotiations ......................................................... 62 6.3 The branch level negotiations ............................................................... 63 6.4 Public sector wage bargaining in 1998 ................................................. 65 6.5 Economic prospects autumn 1998 ......................................................... 66 6.6 Final comments ...................................................................................... 67 Acknowledgements ..................................................................................... 69 References .................................................................................................... 69
4

Preface

Although most Norwegians understand English and we experience a growing internationalisation of most aspects of modern societies, up to date descriptions and analyses of developments in the Norwegian society are not easily available in English. This counts in particular for the field of industrial relations, which has never been established as a separate discipline at Norwegian universities. Studies of industrial relations have thus been marked by the varying approaches of more traditional disciplines, such as sociology, economics, political science and law, leading to a lack of integration and cross-disciplinary exchange. At Fafo, our close co-operation with major organised actors in the labour market and growing participation in comparative international research, have urged efforts to adopt a broader, inter-disciplinary approach. In our striving to establish a better understanding of the driving forces behind developments in Norwegian industrial relations, we have in particular discovered the need for adequate descriptions of the main institutional frameworks and social actors of Norwegian working life. This publication consists of two articles. The first is a reprint of the Norwegian chapter in Anthony Ferner & Richard Hymans Changing Industrial Relations in Europe (Blackwell Publishers 1998). In that article, the basic features of the Norwegian model are explained, and its evolution is traced from the early origin up till 1996. The second article is an updated version of a contribution to the ETUI publication Collective Bargaining in Western Europe 1997-1998 (European Trade Union Institute 1998). Focusing on the bargaining rounds in 1997 and 1998 and the prospects for 1999, it also reviews the level and structure of industrial conflict in Norway. Together, we believe that these articles provides a thorough and up to date picture of industrial relations developments in Norway. In our work on the articles presented here, we have benefited from contacts and exchange with colleagues both abroad and in Norway. Our own department Centre for Industrial Relations and Labour Market Research at Fafo - has been the playing ground, while our relations with major national labour market actors and institutions have been indispensable for deepening our understanding of how Norwegian industrial relations actually work.

Our research has benefited from grants from the Ministry of Local Government and Regional Development and the Research Council of Norway. In addition, we wish to thank colleagues in other European countries and in the United Stated for inspiration and comments. We hope that this way of reporting back also reaches a more general audience, including the labour market parties, official representatives and other observers. Fafo Institute for Applied Social Science Oslo, February 1999 Torgeir Aarvaag Stokke Researcher, dr.polit. Jon Erik Dlvik Researcher, dr.philos. Kristine Nergaard Researcher, cand.polit.

Part 1 Norway: The Revival of Centralized Concertation

Jon Erik Dlvik and Torgeir Aarvaag Stokke

Reprinted from Chapter 4 (pp 118145) in Anthony Ferner & Richard Hyman (eds.) Changing Industrial Relations in Europe, Blackwell Publishers 1998

Introduction

Historical Background and EconomicPolitical Overview

10

11

The Norwegian System of Industrial Relations

Employer Organizations

12

13

Trade Unions

14

15

Regulatory Framework of Collective Bargaining

16

The Institutional Embeddedness of Collective Bargaining

17

18

19

Collective Bargaining in Transition Recent Developements

20

From Crisis to Solidarity Pact The Revival of Concertation

21

The 'Solidarity Alternative'

22

23

The 1996 Pay Round The crumbling of Solidaristic Concertation?

24

The EU and European Labour Regulations

25

A Changing Industrial Relations Agenda

26

Conclusion Continuity and Change in Norwegian Industrial Relations

27

28

29

30

31

Abbreviations

Notes

References and Further Reading

32

33

34

35

36

Part 2 Collective bargaining in Norway 199798

Kristine Nergaard and Torgeir Aarvaag Stokke

37

38

1 General background information

1.1 The Solidarity Alternative

In the 1990s, wage bargaining in Norway has been characterised by the fact that the social partners and the government have agreed to a social pact, the so-called Solidarity Alternative. The aim of this tri-partite pact is to increase employment, secure important welfare policies and improve the Norwegian economy. These goals will be achieved through a moderate wage growth and an active labour market policy, among other things. The Solidarity Alternative, which is a result of the work of the Norwegian Employment Commission, an ad-hoc joint committee, covers the years 19921997. However, the main elements of this pact were already in place in 1988, when the majority of social partners accepted a wage act directed at limiting wage growth. The 1997 LO Congress adopted a resolution to continue to support the main objectives of the Solidarity Alternative, i.e. moderate wage settlements combined with an active employment policy. In its decision, LO emphasises the need for social reforms, amongst others the right to further training and education for all employees. The main employers organisation in private sector, the Confederation of Norwegian Business and Industry (NHO), has expressed a wish for a more decentralised and flexible wage setting policy, but has so far not signalled any withdrawal from the centralised negotiation system, nor from the tri-partite bodies.

1.2 Change of government autumn 1997

The general election in September 1997 resulted in a change of government. A coalition government comprising of the three centre parties Kristelig Folkeparti (Christian Democratic Party), Senterpartiet (Centre Party) and Venstre (Liberal Party) replaced the previous Labour government. The new government is a minority government, and aims at co-operating with parties both to the right and to the left of centre on a case-by-case basis. The three parties have in their political
39

programmes and in earlier political debates had diverging views on several labourrelated issues. This is the case with regard to amending the sick pay scheme so as to make it less generous, and making the regulations regarding temporary employment and hireing out labour less restrictive. So far the change of government has not led to any major changes in labour market policy or industrial relations-related issues. The new centre government has also expressed a wish to continue the dialogue with the social partners.

1.3 Steady improvements in Norwegian economy

During the 1990s the Norwegian economy has improved significantly, and the annual employment objectives defined in the Solidarity Alternative were reached sooner than expected. In 1996 economic growth reached its highest level since the 1980s. There was a substantial increase in GDP, which was up by 5.3 percent from the previous year. Increased revenues from oil and gas production can partly explain this growth. The increase in mainland GDP (GDP exclusive oil and shipping) was 3.7 percent in the same period. The GDP increase for 1997 was 3.5 percent, whereas the latest estimates for 1998 suggest an increase of 3.2 percent. Mainland GDP for 1997 was 3.8 percent and the latest 1998 estimates are 3.5 percent. Due to increasing revenues from the petroleum sector, Norway has had a public budget surplus the last few years. The surplus is transferred to the Government Petroleum Fund. Moderate wage settlements and low inflation during the early 1990s meant that the Norwegian manufacturing sector improved its competitiveness relative to its most important trading partners measured in terms of total wage costs. However, in the period 1994-1997 total wage costs increased more rapidly in Norway than among its trading partners.1 A strong Norwegian currency (NOK) contributed to further raise relative wage costs in Norway. Employment increased by approximately 60,000 from 1996 to 1997, and by a total of 110,000 in the period 19951997. Although the reduction in unemployment has not been as great as the growth in employment, the unemployment rate has been significantly reduced over the last two years. Unemployment, as estimated by the Labour Force Sample Surveys, was reduced from 4.9 percent in 1995 to 4.1 percent in 1997, and an estimate for 1998 is 3.3 percent.2 In May 1998, 2.2
1

NOU 1998:2

See Statistics Norway: Ukens statistikk nr. 18, 1998; Finansdepartementet: St.meld. nr. 2 1997 98 Revidert Nasjonalbudsjett and St.meld. nr. 1 199899 Nasjonalbudsjettet 1999. 40

percent of the labour force were registered as unemployed, while 0.8 percent were enrolled in job creation schemes. The figures for May 1996 were respectively 4.0 percent and 1.8 percent.3 There is now a lack of qualified labour in several sectors of the economy, among others the health sector and the construction industry. In the National Budget for 1998 it was pointed out that the main challenge is to secure sufficient access to manpower in order to fill the vacant positions in the labour market. Norwegian labour market participation is high, and during the first quarter of 1998, 72.5 percent of the population between 16 and 74 years of age were employed. During the second half of 1998, the prospects for the Norwegian economy have become more uncertain. This is caused both by a costly bargaining round in 1998, a high level of public spending, a low oil price and a rise in domestic interest rates. Such factors might alter the foundations on which the current low levels of unemployment and consumer prices rest, and change the competitive situation for the exporting industries. This possibility for of a reversal of trends is strongly reflected in the current economic debate.

1.4 Union demands, employers attitudes and the role of the government
The period from 1988 onwards has been characterised by the agreement of major social partners to comply with the Solidarity Alternative.4 For most of the period this has taken place on a voluntary basis. The 1988 and 1989 wage settlements were partly regulated by law, while the ensuing bargaining rounds may be characterised as normal. The Norwegian bargaining system is centralised both in the private and the public sector. Within the private sector agreements between unions affiliated to the Norwegian Confederation of Trade Unions (LO) and branch associations affiliated to the Confederation of Norwegian Business and Industry (NHO) are dominant. There are, however, a number of other smaller unions, union confederations and employer organisations. Within the state sector the Ministry of Labour and Government Administration bargains on behalf of employers in the state sector, while the Norwegian Association of Local Authorities (KS) bargains on behalf of municipal
3

See the Directorate of Labour: Mnedsstatistikk Mai 1998 and Mnedsstatistikk Mai 1996.

The solidarity Alternative was formulated in 1992. For a more detailed description, see: Stein Reegrds article on Norway in Fajertag (ed) (1996); Dlvik, Brten, Longva and Steen (1997) and Dlvik and Stokke (1998). 41

and county employers. The Municipality of Oslo conducts its own negotiations, but these are usually closely co-ordinated with the main negotiations within the municipal sector. In addition there is an employer organisation for semi-autonomous state enterprises. Different bargaining cartels bargain on behalf of the unions and confederations on the employee side within the public sector.5

For a more detailed description of the Norwegian system of collective bargaining and labour market institutions see Stokke (1997, 1999) and the sources in the previous note.

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2 Collective bargaining in 1997

2.1 The 1997 wage negotiations

The majority of Norwegian wage agreements are two-year agreements that expire in 1998. The 1997 negotiations were therefore mid-term renegotiations. The midterm renegotiations between unions affiliated to LO and NHO, which cover among others the manufacturing sector, building and construction, transport and hotels and restaurants always take place at the confederation level, i.e. directly between LO and NHO. Mid-term renegotiations mainly deal with questions of remuneration, but in 1997 the parties also had to agree on the framework for the extended scheme for voluntary early retirement. The voluntary early retirement scheme was first introduced in the 1988 wage negotiations, and has later been extended to new age groups. In the 1996 settlement the parties agreed that the scheme would be extended to employees from the age of 62 through 63. LO and NHO reached an agreement which gave wage increases varying from NOK 0.80 to NOK 1.50 per hour. The negotiations for other agreement areas in private sector also resulted in the recommended solutions being accepted. In the public sector as well, wage negotiations were concluded after all the parties accepted the State Mediators proposals for the three agreement areas, i.e. the state sector, the municipal sector and the Municipality of Oslo. The early retirement issue was considered to be the most difficult in the midterm renegotiations. The most contentious question was the scope of the scheme, i.e. how many employees in the age group from 62 through 63 years would be covered by the voluntary scheme. NHO emphasised that the scheme should only cover employees with long seniority, for example those who have been working since their late teens. LO wanted the scheme to have a much wider scope and won acceptance for their demand that the extended voluntary early retirement scheme be made applicable to all employees with at least ten years of employment after the age of 50. The parties sent a joint letter to the prime minister, enquiring whether the state would be willing to contribute to the scheme, and received a promise from the prime minister that the government would contribute. The voluntary early retirement scheme for those aged 62 and 63 is partly financed by a fund to which all firms taking part in the scheme contribute, and partly by direct contributions from firms whose employees make use of the scheme. In addition, the state contributes by reducing
43

the tax burden on those who make use of the scheme, and by making it possible to combine the early retirement scheme with the National Insurance scheme. This is made possible by ensuring that people who are using the voluntary early retirement scheme continue acquiring pension rights within the National Insurance (pensions) scheme until the age of 67 years. In contrast to the scheme applicable to the agegroup 6466 years, the state will not cover any of the direct costs in this new extended scheme. In the 1997 bargaining round, the extended early retirement scheme was made applicable to both state and municipal employees. The two largest bargaining parties on the employer side, the state and KS, differed in their views on what type of scheme the agreements should include. While the state wanted a scheme that resembled the one agreed upon by the parties in the private sector, KS proposed an alternative scheme. Although the employee side preferred KS proposal, the prime minister made it clear that the government would not support an early retirement scheme that was distinct from the LO/NHO scheme. For this reason KS in the end accepted the LO/NHO scheme. The only strike to affect the 1997 negotiations came in the wage settlement for the mobile offshore units. The Employers Organisation for Ships and Offshore Installations (ASO) and the Federation of Offshore Workers Trade Union (OFS) were unable to reach a new wage agreement, and after a five-week-long industrial conflict the Labour government decided to recommend compulsory arbitration. A change of government did not lead to a withdrawal of this proposal, and it was eventually accepted by a majority in the Norwegian parliament.

2.2 New basic agreements

In 1997 and early 1998 the Basic Agreement between LO and NHO was renegotiated, along with other basic agreements in private sector.6 The basic agreements complement Norwegian labour law by defining the principal goals, as well as laying down a set of principles and procedures, which regulate the relationship between the labour market parties. A number of issues regarding sympathy actions, shop stewards, employee participation and information and consultation are regulated in the Basic Agreement between LO and NHO, and in other similar basic agreements.
6

Most basic agreements have a duration of 4 years. This kind of agreement is usually renegotiated under the peace duty, i.e. industrial action can not be used.

44

The renegotiations ended in several substantial changes in the Basic Agreement. The introduction of sanctions against severe breaches of the duty to inform and consult trade union representatives with regard to the firms ordinary operations, reorganisation or changes such as mergers or closures. Firms that do not comply with the Basic Agreements clauses regarding information and consultation may be fined up to NOK 300 000. Trade union representatives may also be fined if they disclose confidential information to unauthorised persons. The introduction of minimum standards for how many members a LOaffiliated union must have in order to be eligible to demand the right to a collective agreement in a NHO firm. Until now it has been sufficient that a union had one member. According to the new agreement the union must organise at least 10 percent of the relevant employees before they can demand an agreement. If there already is a relevant agreement in the firm, a new union must organise at least 30 percent of the employees before they can demand an agreement that will cover the same groups of employees. In cases of lawful conflict LO is not to take strike action against NHO firms alone, but also against non-organised firms with the same type of agreements. This will basically affect firms with no employer-affiliation, but which have an agreement that stipulates that a branch-wide agreement is to be followed. The rights of trade union representatives at the concern level (concern representatives) have been expanded. A specific concern representative may be elected within concerns with more than 200 employees. The rights and duties of trade union representatives for which the Basic Agreement provides, will also be made applicable to concern representatives.

The Basic Agreement between NHO and the Confederation of Norwegian Vocational Unions (YS) covers the same sectors as the LO/NHO agreement. YS is a considerable smaller confederation, and usually adopts as a model the LO/NHO Basic Agreement. However, in 1997 NHO and YS did not reach agreement on a revised Basic Agreement, and the negotiations were postponed until the 1998 wage bargaining round. The reason why the negotiations broke down was that YS could not accept the minimum requirements for union membership, which LO and NHO had agreed upon in their Basic Agreement. YS considered these requirements an attempt to favour unions affiliated to LO. In the spring of 1998, YS and NHO reached an agreement in which the special membership requirements regarding companies already covered by an agreement was dropped. This paragraph was also dropped from the Basic Agreement between LO and NHO, leaving both employee
45

confederations with a general 10 percent membership requirement in order to demand a collective agreement.

2.3 Split in AF and establishment of a new employee confederation

Another issue to leave its mark on Norwegian industrial relations in 1997 was the break-up of the Federation of Norwegian Professional Associations (AF). In October 1997 it became public knowledge that seven unions affiliated to AF had decided to break away in order to establish a new confederation in co-operation with the Norwegian Medical Association, a former AF member. The split within AF came as a surprise both to the public and the elected leaders in AF, and resulted in tense relations between AF and the new confederation, Akademikerne. The main reason for the split was dissatisfaction with the results which AF has achieved in the public sector wage negotiations as well as internal conflicts over AFs profile and priorities regarding wage claims (see Dlvik 1999 for a discussion). According to the statutes, Akademikerne will be a confederation for trade unions which organise professionals with higher academic education, i.e. employees with at least a university degree (masters level, in Norway mainly five years or more of higher education) or equivalent. Furthermore, Akademikerne will strive for a differentiated and market based wage determination, as far as possible through local bargaining at the firm level.7 The new confederation has approximately 100,000 members, of which approximately 70,000 are wage-earners (August 1998). The new confederation was legally prohibited from negotiating during the 1998 wage settlement. In two lawsuits during the spring 1998, Akademikerne sought to get their negotiating rights established, but the courts ruled that AF still held the bargaining rights during the 1998 wage settlement. The main reason for this decision was that the membership in AF of the seven unions which broke away during the autumn 1997 would not be legally terminated until 31 December 1998.

Akademikerne: Vedtekter.

46

2.4 Committee proposal on a further education and training reform

A third issue which has been on the political and industrial relations agenda in Norway during 1997 is the question of further education and training. One of LOs demands in the 1996 wage settlement was the introduction of arrangements to ensure further education and training. During the autumn of 1996 the government appointed a committee to look into questions relating to adult education as well as further education and training. A broad group of interests were represented in the committee, among others via representatives from employee and employer organisations. The committees recommendation was presented on 1 October 1997. The committee proposes that all employees shall have a statutory right to leave of absence for educational and training purposes, but this does not include a right to pay during the leave of absence. The committee believes that it is important to build up a system in which employees actual qualifications are documented. The system should, among other things, include information about job tasks, on-the-job training, external courses and further education and training. One of the committees proposals ensures that adult employees are given the opportunity to obtain up to 12 years schooling within the present educational system. The proposed reforms within further education and training must be seen as moderate, and will be introduced gradually. Significant parts of the reform are also left to the labour market parties to define and implement, and it was expected in 1997 that the question of implementing and financing the reform would be on the agenda during the 1998 bargaining round.

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3 Wages and purchasing power 1997

3.1 Development in wages

As tradition will have it, the 1997 mid-term wage negotiations started with the negotiations between LO and NHO regarding manufacturing, construction, private transportation, etc. Depending on wage level and whether the branch has the right to negotiate at company level or not, the parties managed to agree on general wage adjustments. LO and NHO agreed that agreement areas in which the average annual income falls below NOK 185,000 shall receive a higher central increase than agreement areas with an average annual income above this limit. Moreover, the increases shall be higher in areas without local bargaining rights, relative to those areas with local bargaining (see Table 1). It has been common practice during the 1990s that the central increases vary according to whether or not local increases are given within the different agreement areas. However, the vast majority of collective agreements within the LO/NHO area open up for local bargaining, and provide an average annual income well above NOK 185,000. The wage increases came into force on 1 April 1997, and were estimated to increase wages on average by NOK 1.00 or by 0.8 percent from 1996 to 1997. The rules guaranteeing a wage level linked to the average earnings (the low wage guarantee), gave additional wage increases for some groups from 1 October. In addition to the centrally agreed wage increases, local negotiations take place at the company level.
Table 1 Central wage increases for different agreement areas within the LO/NHO area. Increase per hour
Wage level (annual) Under NOK 185,000 Over NOK 185,000 With local bargaining NOK 1.50 NOK 0.80 Without local bargaining NOK 1.80 NOK 1.20

In the wholesale and retail trade sector there was a general wage increase of NOK 1.20 and certain adjustments made to the minimum wage standards. All together this was estimated to give a central wage increase of NOK 1.50 per hour. Employees in the banking sector achieved a general rise of 1.9 percent. In addition the lowest paid employees were given an extra wage increase of 0.2 percent.
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The new agreements in public sector provided employees with an annual wage increase of NOK 2,500. In addition, employees with an annual salary below NOK 200,000 received a supplementary increase varying from NOK 100 to NOK 900 per year. In the 1997 state sector settlement only approximately 40 percent of the total wage increases were allocated in the central wage negotiations. The remaining funds were set aside for the central wage regulation negotiations and for local negotiations. Local negotiations took also place in the municipal sector. Provisional estimates show an average wage growth of 4.25 percent for 1997 (Table 2). Wage increases are somewhat higher amongst white-collar workers within NHO firms compared to blue-collar workers in the same sector. One exception is workers in the construction industry, who on average had a wage growth of 6 percent. The wage increases among public sector employees and blue-collar workers in manufacturing were 4 percent. The estimates do not indicate, however, any significant differences between the main categories of employees.
Table 2 Estimated wage growth from 1996 to 1997. Selected groups

Percent All groups Workers in establishments affiliated to NHO (employees paid by the hour) Manufacturing Construction Land transport Salaried employees in establishments affiliated to NHO Employees in retail and wholesale trade Employees in hotels and restaurants Employees in commercial and savings banks Central government employees Municipal and county employees 4.0 6.0 4.0 4.8 4.5 4.5 4.9 4.0 4.0 4.25

Source: NOU 1998:2 Om grunnlaget for innteksoppgjrene 1998 (The Technical Calculating Committee on Income Settlement, Report No. 1 1998).

The 1997 LO/NHO wage agreement stipulated that the 1997 settlements covering mainly blue-collar workers, should have a normative effect on all groups including senior white-collar workers and management groups. In the autumn 1997, LO requested that top management salaries should be included in the Technical Calculating Committees figures on last years wage increases. The average wage growth of top managers in the private sector was between 2.5 and 4.75 percent higher than the increase experienced by the average wage earner during 1997.
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3.2 Cost of living

The cost of living index for 1997 increased by 2.6 percent. During 1997 the tax burden was not significantly increased. The estimate for real wage growth after taxation for 1997 is 1.8 percent, against 2.9 percent in 1996.

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4 Other issues

4.1 Working time developments

The 1997 wage settlement did not entail any changes to weekly or daily working time. Working time issues were not on the negotiation agenda, mainly due to the fact that the 1997 bargaining round was mid-term negotiations. However, a central issue in the negotiations was how to implement the agreement-based voluntary retirement scheme, which in the last settlement was extended to those aged 6263 years.

4.2 Europeanisation of collective bargaining

There has been little movement towards europeanisation of collective bargaining in Norway. The European Works Council (EWC) Directive has been implemented by way of collective agreement and supported by back-up legislation. The principle elements of the EWC Directive are included in the Basic Agreement between LO and NHO (see Reegrd 1996 for further information). The implementation of the EWC Directive also entailed certain institutional changes, described in the ETUI 1996/1997 report on collective bargaining. In 1996 17 Norwegian multinational enterprises fell within the scope of the directive, and today the group comprises approximately 20 companies. There have been no EWC agreements concluded after 22 September 1996 (when the Norwegian collective agreement on EWCs came into effect). The directive on part-time work and the parental leave directive are still in the process of being negotiated between the EU and the EEA. None of these directives is expected to require any substantial changes in Norwegian labour market regulations; the general impression is that the present national provisions by and large fulfil, and in many instances go beyond, the requirements of the EU agreements. There has been some debate concerning the impact of the European Monetary Union and the introduction of the euro on Norwegian monetary policy. Todays monetary policy is aimed at maintaining a stable (not fixed) Norwegian Krone
51

(NOK) exchange rate against the ECU. The government has signalled that there will not be any major changes in Norwegian monetary policy; Norway will still pursue a policy in which the Norwegian currency is kept stable in relation to other European currencies, among which the euro will play an important role. In the Revised National Budget for 1998, presented in May 1998, the government states that the EMU will lead to stronger competition for the Norwegian economy as well as require a number of practical adjustments. It was also announced that the government would leave the specific choice of reference currencies to be decided by the Central Bank. The general impression, however, is that neither the government nor the Norwegian Central Bank or the labour market parties expect that the introduction of the euro or the EMU will lead to any major changes in Norwegian economic policy or industrial relations in the short and medium term.

4.3 Level of wage determination

A majority of employees within the LO/NHO area works in companies with company level bargaining. There is no detailed overview over the size of the local wage increases, but estimates concerning total wage drift for the manufacturing sector suggest that the level was more or less the same for 1997 as it was in 1996.8 In 1997, blue-collar workers in the manufacturing industry witnessed a 4.0 percent wage rise. Of this, 1.6 percent was spillover from the 1996 negotiations, 0.6 percent was granted in the 1997 central negotiations and the rest was due to wage drift. However, local firm-related negotiations is just one of the components of wage drift, i.e. changes in average wage levels that may not easily be explained by central or branch-wide increases. The employer side, and particularly NHO, has argued that the determination of wages should to a greater extent take place locally, and that the wage systems should be based on individual increases. An internal working group within NHO has proposed that labour law and agreements should in the future be based on a few simple and common regulations which are strictly enforced, while it should be left to the firms or the local parties to determine the solutions. The working group has also proposed individual assessments and individual wages.9 In its statement regarding the 1997 negotiations, the NHOs Central Board also recommended that the affiliated establishments should consider using bonus systems. Several
8

NOU 1998: 2. NHO (1995).

52

questionnaires directed to private sector companies show that wage systems based on incentives such as bonuses are not uncommon. However, only a minor portion of the employees claim that they have bonuses.10

4.4 The debate on flexibility11

Working time and different kinds of flexible working time arrangements are on the labour market parties agendas, and form part of their strategic discussions. NHO has on several occasions called for more flexible working time arrangements and has put the issue on the bargaining agenda on several occasions during the past few years. This has not, however, resulted in any significant changes to the agreements. NHO has also called for changes in the regulations regarding overtime, employment contracts and the hireing out of employees, and argues that the rather strict Norwegian regulations should be changed into more flexible arrangements. Even if several of the political parties, some of the government parties included, support such changes, there is at present no political majority in favour of changing todays regulations. The latest figures presented by Statistics Norway show that the percentage of people on temporary employment contracts was lower in 1997 compared to previous years. However, private placement services doubled the number of invoiced man-hours from 1994 to 1996 and the growth has continued in 1997. LO is also calling for a wider debate regarding working hours and working hour arrangements. In the organisations new Action Programme, which was debated at LOs Congress in May 1997, support is given to a shorter working week, lower retirement age and longer annual leave. LO does not stipulate which of the measures should be given highest priority. Instead LO will strive for the creation of collectively based schemes providing working hour arrangements which are in accordance with the changing wishes and needs of each individual. LO will look into the possibility of establishing a time account scheme, i.e. a scheme in which it is possible to choose different working hour arrangements during different phases of ones life span and career.

10

See for example Nergaard (1998); Olsen and Torp (eds) (1998). See Grimsrud and Stokke (1997) for a more detailed discussion. 53

11

4.5 Gender issues

One of LOs demands during the 1997 settlement was the reduction of the wage gap between female and male employees. This has also been a general demand in previous settlements. The other employee confederations also wanted to see an improvement in womens wages. The overall picture with regard to wage differences between women and men employed on a full-time basis has not changed much during the 1990s. When the figures are broken down into groups or agreement areas, one can see a more distinct levelling out of the wage differences, even though on average men earn more than women within most of the major agreement areas. There are only minor changes in womens average wage level compared to mens from 1996 to 1997.12 Within the private sector no specific increases for women were granted. However, the profile in the central level settlements (flat wage increases or the highest increases to the lowest paid groups) gave a greater percentage increase to all lowincome groups. This is generally seen as a way to even out wage differences between men and women. In the 1997 LO/NHO agreement, the parties included a statement encouraging the local parties to discuss questions of equality and equal pay with the aim of agreeing on a firm-specific equality agreement. They stressed that this work should be intensified. LO and NHO will, in co-operation with their member organisations, prepare strategies, organise course and conference activities and develop course material to aid the work done at the local level. The public sector also witnessed flat rate wage increases, with a supplemental rise for the lowest paid groups. Within the state sector the agreement included a provision stating that women should get a larger share of the pot in the central adjustments negotiations than what the pro-rata-distribution normally would entail. In the agreement for the municipal sector it is stipulated that the local increases shall attach greatest importance to low incomes and equal pay. The gender aspect was also present in the negotiations regarding the question of voluntary early retirement. The parties disagreed over which groups of employees the scheme should cover; NHO wanted to limit the scheme to employees with long seniority. LO wanted the scheme to have a much wider scope and in particular pointed to the fact that many women did not enter the labour market until a later age, and would therefore not be covered by the scheme if NHOs criterion regarding seniority were accepted. LO therefore strongly emphasised the equality aspect, and their view prevailed; the extended voluntary early retirement scheme will be made applicable to all employees over 50 with at least ten years of employment.
12

See for example NOU 1998:2.

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5 Industrial disputes in the 1990s

5.1 Legal background

The peace duty makes industrial conflict during the collective agreement period illegal. The obligation is highly respected, and wildcat strikes are not common in Norway (in contrast to for example Denmark). A legal opportunity to go slow exists in some minimum wage agreements, but is seldom used. With the exception of a major conflict in 1986, the use of lockout is also rare in Norway - at least in its active form. Thus, most industrial disputes take the form of strikes during the negotiations for renewal of collective agreements. Regulations in both labour law and basic agreements reserve a major role for the ballot among union members in collective bargaining. Ballots are usually held in all bi-annual main bargaining rounds (for example 1994, 1996), but they are not imposed by the state on the unions. Instead, they play an important role in getting member acceptance for recommended proposals. Ballots are not needed if the union wants to call a strike.

5.2 The level of industrial disputes

Strikes in Norway are not frequent, and averaged only 14 per year in the period 1978-1997.13 Still, once a strike is called, it tends to cover a significant number of employees and last several days. Compared to the international average, Norway thus scores low on the number of strikes, but medium in relation to workers involved and working days lost (see Edwards and Hyman 1994, Aligisakis 1997). The number of strikes, and especially the number of workers involved and the duration,
13

The sources for statistics are Statistics Norway. In addition, we have had access to data on the individual disputes. The quality and coverage of the statistics is judged as good. All types of strikes and lockouts are included. Workers indirectly involved are not counted. There is a minimum criterion for inclusion of a dispute, namely duration of at least one day. Such short disputes are uncommon in Norway. Alternative sources indicate that very few incidents are left out of the official statistics.

55

fluctuate with the type of negotiations. In typical mid-term years as in 1991, 1993, 1995 and 1997, strikes are somewhat fewer and include few workers. In the main bargaining rounds, as in 1990, 1992, 1994 and 1996, strikes are both longer and include more workers (Table 3). A large number of working days lost in a single year tends to relate to one or a few major disputes. This is the case with private transport in 1978 (33,800 wdl); oil and gas extraction in 1980 (40,200 wdl); private transport (148,700 wdl) and fishing (50,700 wdl) in 1982; public sector (81,000 wdl) in 1984; the lockout (517,300 wdl), the public sector (343,000 wdl) and oil and gas extraction (90,000 wdl) in 1986; a public sector political strike both in 1988 (77,000) and 1990 (50,000 wdl); the local government sector (253,400 wdl) and private transport (56,400 wdl) in 1992; the public sector in 1995 (46,400 wdl); and manufacturing (222,300 wdl) and electrical installation (239,700) in 1996. Lost working days peaked in 1986,
Table 3 Industrial disputes 19781997
Industrial disputes 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Total 14 10 35 17 12 9 21 11 16 10 15 14 15 4 16 12 20 11 18 6 286 Workers involved 4,459 2,773 18,752 4,294 24,581 1,018 30,635 6,557 165,740 2,465 8,332 11,287 60,674 ,396 38,925 6,604 14,735 10,174 53,257 1,305 466,963 Working days lost (wdl) 62,888 7,010 103,807 28,257 281,183 5,897 104,429 66,473 1,030,928 12,905 83,254 16,880 139,047 2,564 365,319 33,832 97,213 50,669 549,842 6,847 3,049,244

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1992 and 1996, but there are no general tendencies towards increase or reduction in the period reviewed. In Table 4, working days lost due to industrial disputes in the period 1978 1997 is broken down by industry. Column 3 in the table might suggest that transport and construction are the most strike-prone industries, but the inclusion of construction is largely due to a major lockout in 1986. Public sector scores lower than both the average and most private sector industries, and both trade and other private service is marked with extremely low levels of industrial disputes. When union density is also considered, transport seems to be joined by hotels and restaurants in being strike-prone. This is partly explained by the lockout in 1986, which also affected hotels and restaurants, in addition there was a strike at the national level in 1996. The measurement of trends over time is somewhat problematic, because of the low level of strikes/conflicts. Still, we can compare private manufacturing and service with the public sector. This is shown in Table 5. There is a slight tendency towards a reduction of the role played by manufacturing in industrial disputes. Again, this is caused by a low number of actual disputes, and the significance of the trend is questionable. No clear signs towards a tertiarisation of conflicts in the 1990s can be noted. The current levels of disputes, especially in transport, are normal and both the trade industry and other private services still score low. Public
Table 4 Working days lost due to industrial conflict by industry, 19781997. Absolute and relative figures*
Industry (number of conflicts) Agriculture (1) Mining, oil (2) Manufacturing (3) Construction (5) Trade (6162) Hotels and rest (63) Transport (7-private) Other private service (8) Public sector (9) Total
*

Working days lost 1,515 107,387 875,341 556,637 2,082 107,219 389,454 24,236 985,373 3,049,244

Days lost per 1000 employees 4.5 245.7 266.2 486.6 0. 7 209.4 517.2 24.4 130.3 171.1

Union density, % 27 62 62 48 23 24 48

Days lost per 1000 unionised employees 16.6 396.3 429.4 1,013.7 3.2 872.6 1,077.5

79 57

165.0 300.1

The material from Statistics Norway has been revised in order to differentiate between private (18) and public (9) sector, and between trade (6162) and hotels and restaurants (63). Employment figures used in columns 3 and 5 are wage earners in 1986. Figures on union density are taken from Nergaard (1996). 57

sector disputes started to play a role in Norway during the mid-1980s, and the current level is again caused by only a few incidences.
Table 5 Working days lost by sector in percent of total, 19781989 and 19901997
19781989 Manufacturing (2, 3) Other private sector (1, 58) Public sector (9) Total 36 33 31 100 19901997 27 39 34 100

5.3 New strategies

Ad-hoc state intervention with compulsory arbitration has been a constant factor in collective bargaining in Norway since 1916. ILO conventions restricting such state intervention to essential services, have largely been ignored by governments also in the 1980s and 1990s. In certain situations where unions need to save face towards their own members, the option of resorting to compulsory arbitration by provoking state intervention has also played a role (Stokke 1999). Collective labour law equates industrial disputes with a full stoppage of work. A union may chose to call a selective strike, but each striker must fully stop working. Thus, industrial disputes take the form of a walkout. In the public sector, unions still strive with the double effect of the strike, affecting both employers and the public. The labour parties in for example Sweden can also notify each other with partial stoppages of work on the individual level. This was attempted by the largest LO union in the municipal sector in Norway in 1998, but the employers rejected it. Although both innovation and co-ordination between bargaining cartels in the public sector occurs, progress thus seems slow. A new strategy to increase the probability of a strike has been adopted by LO and its private sector unions in the 1990s. While earlier calls to strike often included all organised workers in the LO/NHO area, notifications in the 1990s have been carefully arranged as selective strikes in order not to alter the internal competitive situation in a sector or to provoke the state. An important function of this new strategy has been to alert union members during ballots, because of the increased realism of the strike. So far, with the exception of the 1996 metal industry strike (see below), recommended proposals have in large been accepted by union members. Strikes in private sector industries with low union density, such as hotels, restaurants and freight transport by road, have included aggressive picketing tending
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towards the illegal, and accusations of strikebreaking. Employers have sometimes responded with legal suits, but no trends towards union busting, or similar actions, can be noted.

5.4 European impact of national strikes

Most industrial disputes in Norway have been national in scope. Four exceptions should be mentioned. First, strikes in aviation in any Scandinavian country tend to affect passengers in all three countries and even beyond. This is not a new feature (see Stokke 1998:52930). Second, strikes in transport can affect delivery of foodstuffs (especially fish) and other goods to the continent. Third, strikes in oil and gas extraction can affect the delivery of energy sources to the continent. Such effects, and the possible damage to Norways reputation as a stable deliverer of oil and gas, have in fact been used as an argument for state intervention with compulsory arbitration in these strikes (see Stokke 1998). Fourth, an agreement in the pace-setting metal sector in 1996 was rejected by union members in a ballot, prompting the most far-reaching private sector strike since the 1930s. The conflict demonstrated for the first time in Norway the increased effectiveness and international impact of work stoppage in a context of transnational just-in-time production. Cancellation of Norwegian deliveries rapidly threatened to lame parts of European car industry. Wary about loss of contracts, employers were unprepared for conflict, and many apparently waited for government intervention with compulsory arbitration. While receiving no support from Swedish metal workers who were under pressure from Volvo, the unions got public support from the German union IG-Metal, who promised they would make sure Norwegian companies did not loose their contract status. It turned out the unions were also unprepared for lasting conflict, and a modestly amended compromise was rapidly struck during mediation (Dlvik and Stokke 1998, Stokke 1998).

5.5 The current debate

The level of industrial disputes in Norway seems largely to be accepted by employers, unions and the government. A certain number of strikes seems to be a price the employers are willing to pay for the current incomes or concertation policies, and the parties must accept both strikes caused by a no-result in a ballot and strikes among unions kept at the fringes of corporatist networks.
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Two issues are still under debate. First, employers wish a more decentralised wage setting in order to increase the flexibility of the individual firm. Knowing that such a proposition will be met with demands that the right to strike also must be decentralised, the employers have not, however, been aggressive (as in Sweden) in pursuing this approach. Second, the officially appointed Labour Law Commission (with representatives also from LO and NHO) suggested in 1996 a reform of the Labour Dispute Act, aimed at reducing the amount of strikes in connection with competing collective agreements. Stricter principles of inderogability, implying that agreements signed by one of the main confederations can not be deviated from by independent unions, are combined with stricter criteria for recognition as a confederation. This would strengthen the role of confederations, also urging stronger internal co-ordination and more central decision-making power in issues of collective bargaining and industrial action in AF and YS. In the municipal sector it is suggested that votes of individual unions can be coupled within each confederation, like in the state sector. The proposed reform could, if passed, effectively curb some militant unions, for example, in aviation and the oil sector. But it is harder to see how it could resolve the more pressing issue of conflicting settlements between the main confederations, especially in public sector. The reform is in addition quite controversial, and its destiny is still not known (Dlvik and Stokke 1998, Stokke 1998). The latest signals from the government indicate a wish to do something about the bargaining structure in the municipal sector. In relation to inderogability of collective agreements in the private sector however, the need for stricter principles seems less acute now than in the early 1990s according to the government. The government nevertheless signals new rounds of deliberations on the modernisation of the Labour Dispute Act (Aftenposten December 18, 1998).

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6 The bargaining rounds in 1998

6.1 Background
During 1998 the two-year wage agreements in Norway were renegotiated. A central issue prior to this years settlement was deciding upon type of settlement, i.e. whether the negotiations are to take place centrally between LO and NHO or at the branch level. Traditionally the question concerning type of settlement is left to LOs General Council to decide, and it does so at same time as adopting its bargaining demands. LO sees type of settlement as a matter of practicality, which has to be resolved prior to each settlement. Before the 1998 renegotiations, several unions, as well as the elected leadership in LO, expressed a preference for direct negotiations between the two confederations. An important reason was the wish to include questions regarding rights to further education and training. However, the United Federation of Trade Unions, which is LOs largest private sector union, decided to cast their vote in favour of branch level negotiations and their view won out. At its General Council meeting on 10 February 1998, LO voted in favour of industry-wide settlements in the forthcoming bargaining round in the private sector. In addition, LO wanted to bargain with NHO, at the confederate level, over the principles that are to be applied in a reform for further education and training. The two last main settlements (1994 and 1996) were industry-wide. LOs decision that the 1998 settlement is also to be industry-wide means that Norway experienced the third industry-wide main settlement in a row. As is customary, LOs General Council also voted over the guidelines to be applied to the industry-wide negotiations. LO demanded increased purchasing power for all of its members, favouring groups earning below NOK 250,000 per year. LO also wanted to initiate discussions regarding flexible working hours, and would like the parties to examine more closely different types of arrangements concerning holidays, shorter working hours and leave of absence for the purpose of child care and education. LO demanded a clause in the agreements ensuring them the right to renegotiations, if changes to taxation levels are introduced which have not already been foreseen in the 1998 State Budget. The employers principles for the 1998 negotiations were adopted at NHOs Central Board meeting, and what came out of the meeting was by and large NHOs first reply to LOs demands. NHO emphasised that wage growth must not be higher than the competitors in other
61

countries, thereby indicating that total wage growth for 1998 should not exceed 3.5 percent. In addition, NHOs Central Board emphasised that the branch associations must ensure that firms take responsibility with regard to the wage development of managers, senior staff and other groups with strong market positions. NHO did not reject LOs proposal to examine closer different schemes to increase flexibility, but emphasised that the schemes must not result in a further reduction in employment.

6.2 Confederation level negotiations

Preceding the industry-wide wage negotiations within the private sector, LO and NHO bargained over more general issues. The most central issue during these negotiations was the question of further and continuing education. The parties agreed to an action plan for competence development which is to be the basis in their endeavour to realise a further and continuing education reform. The action plan adopts many of the proposals put forward by the public committee in October 1997, in which both LO and NHO were represented. LO and NHO agreed that an individual statutory right to leave of absence for educational purposes should be introduced. Qualifying conditions should be at least three years of continuing employment, and two years of employment in the firm from which leave of absence is requested. LO and NHO would like practical questions regarding the leave to be handled by the parties at the company level, and that the right to leave may be temporarily deferred if operations cannot be reasonably maintained as a result of the leave. LO and NHO would also like to see the establishment of a system which will strengthen further and continuing vocational training. Such a system shall partly be financed by way of funds set aside in the wage settlements. LO and NHO believe that all employees/employers, as well as the public authorities, must contribute financially to the scheme. The parties would like to ensure that those who have not had the right to publicly financed secondary education (up to 12 years of schooling), i.e. those born prior to 1972, should be entitled to such education. The parties believe that it is a public duty to develop and run appropriate educational schemes, and that the public authorities therefore should be responsible for a scheme for adults. LO and NHO are demanding that the so-called Section 20 scheme be retained. The scheme, which has its statutory base in the Vocational Training Act, allows adults to use their own work experience to compensate for theoretical learning when qualifying for their certificate of completed apprenticeship. The parties also emphasise
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that competence acquired through training at work should be better documented. LO and NHO will jointly develop schemes which make it possible to standardise the documentation of individuals acquired competencies. The parties informed the prime minister of the main issues of the negotiations, and the government was asked with what they could contribute. In his response to LO and NHO, the prime minister promised that the government would present a White Paper before the summer. The prime minister signalled that the government will be in favour of an individual right to leave for the purpose of further and continuing education, and that it will not propose to abolish the Section 20 scheme. The government would also like to make it possible for those adults who have not completed primary or secondary school to do so. LO and NHO also agreed on minor adjustments to the existing arrangement for agreed early retirement, among other things a readjustment of companies membership fees, and the introduction of a one-year obligatory period of delay from when the collective agreement has been established to when the early retirement scheme takes effect. The last change was introduced in order to avoid free riders.

6.3 The branch level negotiations

Since the 1998 renegotiations were conducted at the branch level a large number of agreements were to be negotiated individually in the private sector. As tradition will have it, the 1998 wage negotiations started off in the metal industry with the agreement between the Norwegian United Federation of Trade Unions and the Federation of Norwegian Engineering Industries (TBL). The metal industry is the largest agreement area between LO and NHO. The parties agreed on a general wage increase of NOK 3.00 per hour, and the minimum wage rate and the rates for shift work were also adjusted. The employees of the metal industries have the right to workplace (company level) negotiations, and as such the central negotiations will be supplemented by negotiations at the company level. A large majority in a member ballot has accepted the new agreement. The general wage increase of NOK 3.00 was copied in many of the subsequent agreement areas in which the central agreement is supplemented by additional company level negotiations. The various new agreements differ more when it comes to special increases such as bonuses for skilled workers, changes in minimum wage levels or rates for shift work. However, there are some exemptions to the general increase of NOK 3.00 per hour. In the retail and wholesale trade sector, the Norwegian Union of Commercial and Office Employees, which is a LO union, and the Commercial
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Employers Confederation, which is an independent employers organisation, negotiated an agreement allowing for a general wage increase of NOK 5.00 per hour. This sector is regarded as a low-pay area. Employees in hotels and restaurants do not have the opportunity of workplace negotiations. They received a general wage increase of NOK 3.00 per hour and a low-pay bonus of NOK 2.00 per hour. For some groups the wage rates were raised even further, and the lowest paid groups secured approximately NOK 15,000 per year. Incorporated into the new agreement is an entirely new type of wage bonus arrangement for the enhancement of equal pay among women and men. The amount of NOK 1.00 per hour per employee will be set aside as an equal pay fund at the company level. In order to use the funds there must be established company agreements on equal pay. In companies with 10 or more employees committees on equal pay must be established, and in companies with less than 10 employees such committees must be established only if one of the parties expresses a wish to do so. Such agreements must be entered into before 1 October 1998, while the bonus arrangement based on the funds will be backdated to, and come into force, on 1 April 1998. The hotel and restaurant sector is a female-dominated sector, where approximately 70 percent of employees are women. In the banking sector the parties agreed on a general wage increase of 4.1 percent per year and a minimum wage increase of NOK 10,000 per year. The parties in the banking sector also accepted a new agreement structure where the scope for company-level agreements was expanded. The first instance of industrial action took place in the transportation sector, where the negotiations between the Norwegian Transport Workers Union (NTF) and the Norwegian Bus Drivers Union (NRAF) on the one side, and the Federation of Norwegian Transport Companies and the Norwegian Hauliers Association on the other, broke down just after midnight on 13 May 1998. It is the first time that the two competing unions, NTF (a member union of the Norwegian Confederation of Trade Unions, LO) and NRAF (a member union of the Confederation of Vocational Unions, YS) have joined forces in wage settlement negotiations, and this year they have co-ordinated their demands, negotiations and the selection of companies to be taken out on strike. The original demands by the employee side were a general wage increase of NOK 17.00 per hour in scheduled bus transport. Long distance fright transport workers demanded NOK 50.00 per hour as an alternative to the present piecework arrangements, and a guaranteed monthly salary of NOK 18,000. The wage negotiations in private sector have not led to any substantial changes in relation to working hours. The parties in the metal industry have, however, asked LO and NHO to consider new working hour arrangements, in which the needs of employees for flexibility in their working life as well as the companies need for flexibility in facing increasing competition are taken into account. Similar
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flexibility clauses have been incorporated into other agreements as well. Employees in the metal industry were given the right to paid leave of absence for the purpose of taking children, on their first day, to school or nursery. This provision has also been incorporated into other agreements in the private sector. Female employees with small children have been given the daily right to two half-hour breaks, or alternatively one hour off, for breastfeeding purposes. Wages in the metal industry are estimated to increase by 3.5 percent as a result of the new central agreement together with wage increases resulting from the 1997agreement. The results from the local bargaining rounds indicate a total wage increase of 5.5 percent in 1998 (TBL September 1998). Estimates in other manufacturing industries are in some cases slightly higher. In retail and wholesale trade, total wage growth in 1998 is estimated to be 6 per cent, whereas employees in hotels and restaurants on average will have their wages increased by 6.5 percent.

6.4 Public sector wage bargaining in 1998

The wage settlement negotiations in public sector were partly concluded on 28 May 1998. The negotiations covered the three agreement areas of the state, the municipal sector and the Municipality of Oslo. In the state sector the LO-affiliated unions, the YS-affiliated unions, the Norwegian Union of Teachers and the Norwegian Police Federation accepted a proposal put forward by the state mediator, while the Federation of Norwegian Professional Associations (AF) rejected the proposal and went out on strike. In the municipal sector (excluding Oslo) an agreement was reached between the employer side and the LO unions, the Norwegian Union of Teachers and parts of YS, while AF and some of the YS-unions went out on strike. In the Municipality of Oslo a few AF-unions (among others the Nurses Association) went on strike. Some of these strikes were met with compulsory arbitration, because they threatened essential services or other vital public interests. The new main confederation, Akademikerne, did not take part in this years negotiations, but has accepted the negotiation result in the municipal sector. All employees in the public sector received a general wage increase of NOK 10 000 per year. In the state sector an additional 2 percent of the total wage mass was set a side for central wage adjustment negotiations, which will take effect from 1 August 1998. In these negotiations priority was given to women and employees in the school sector. Funds have also been set aside for company level (local) negotiations. In addition to the general increases, there will also be substantial increases in starting wages. As a result of the settlement the wage growth in the period 1997 1998 is expected to be 5.7 percent. Teachers received on average the highest increases.
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In the municipal sector, some adjustments have been made to the wage rate of the lowest paid groups, and funds have been set aside for local negotiations. The negotiations in the municipal sector are estimated to produce a wage growth of 6.1 percent. During September and October of 1998, the National Wage Board has ruled in those public sector disputes which were halted by compulsory arbitration. Two municipal sector unions affiliated to the Federation of Norwegian Professional Associations received partial support for their demands. Some occupational groups, among others nurses with special education and radiographists, were given wage increases beyond the increase established in the agreement accepted by the other organisations. The other rulings in the state and municipal sector produced the same result as the organisations were offered during mediation prior to the strike, and which was accepted by a majority of the organisations. The National Wage Board has traditionally been cautious in accommodating demands from an organisation that goes beyond what the majority of organisations have already approved. Since the beginning of the 1970s the board has ruled in approximately 60 disputes. Only in a few of these cases have the board deviated from already established settlement norms. Still, the deviation in 1998 have lead to demands concerning renegotiations by some of the unions who participated in the majority deal in May 1998.

6.5 Economic prospects autumn 1998

In the last few years Norway has experienced steady economic growth and a rapid increase in employment rates. Several sectors started experiencing considerable problems in recruiting qualified labour, and in the National Budget for 1998 it was pointed out that the main challenge for the immediate future is to secure sufficient access to manpower in order to fill the vacant positions in the labour market. In the Revised National Budget for 1998, which was made public by the Norwegian government on 15 May 1998, macroeconomic estimates were adjusted in relation to the original budget proposal put forward in the autumn of 1997. The governments general wage growth figures for 1998 was readjusted from 3.5 percent to 5.0 percent, and it was added that the figures might be even higher. The estimated unemployment rate was adjusted from 3.75 percent to 3.2 percent. Since May 1998 there has been considerable concern about an overheating of the Norwegian economy. A rise in domestic interest rates, stabilising at a level twice that of the German level, continued low oil prices and an unstable political situation coupled with speculations towards the Norwegian Krone has made
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the macroeconomic outlooks uncertain. The government has again, in September 1998, readjusted the wage growth figures for 1998, this time from 5 to 6 percent. The State Budget for 1999, proposed on September 25 1998, included attempts to tighten public expenditure. One proposal was to cut the number of holidays by one day in order to reduce the pressure in the labour market. This part of the budget proposal was seen as a declaration of war against Norwegian employees, according to a joint statement issued by the trade union confederations. Norway came to a halt for two hours on 15 October 1998, when the three main trade union confederations - LO, AF and YS - took strike action against the proposal. In November, the Norwegian coalition government managed to reach an agreement with the opposition Conservative and Progress Parties on a new State Budget for 1999. The agreement meant that the government had to abandoning earlier suggestions of tax and duty increases, along with controversial cuts in parental benefits. The proposed eradication of an extra days holiday was also left out, and there will be no changes to the present generous sickness benefit scheme. Thus, peace was largely re-established with the unions. Main spokesmen of the Norwegian LO have stated that the wage increases in 1998 were too high, and that the 1999 bargaining rounds must focus on other things than pay. An attempt to meet the new situation with more active income policy has been signalled both from the government and from the major labour market parties.

6.6 Final comments

So far, estimates for the 1998 bargaining round suggest a wage increase of around 6 percent. With an estimated consumer price index increase of 2.6 percent, this indicates a substantial growth in real wages. After the 1996 settlement, the central question was if the Norwegian Model will work just as well during times of economic growth as it has during times of economic recession, or whether the consensus regarding a moderate wage policy will break down when the economy picks up and unemployment decreases. This question will be even more relevant after the 1998 settlement. A two-day seminar on income policy between the main labour market parties and the government was held on December 1617. The discussions were of a informal nature, and resulted in what is said to be an agreement on challenges for the future (Aftenposten, Dagens Nringsliv, Dagsavisen December 18 1998). The establishment of commissions to look at the future of the Solidarity Alternative has been proposed, this time composed also of those labour market parties not members
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of the previous commission. Such an atmosphere might signal a new step towards the revival of Norwegian income policy concertation, within a macroeconomic and labour market situation that is more uncertain than in a long time.

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Acknowledgements
This article is partly based on Fafos reports to the European Industrial Relations Observatory (http://www.eiro.eurofound.ie/). In addition, the work has been supported by Fafos strategic institute program on labour relations and collective bargaining, financed by the Norwegian Ministry of Local Government and Regional Development. We wish to thank Jon Erik Dlvik and Hvard Lismoen for comments.

References
Aligisakis, Maximos (1997): Labour disputes in Western Europe: Typology and tendencies, in International Labour Review (136), 1:73-94 Dlvik, Jon Erik (1999): Norwegian trade unionism between traditionalism and modernisation, in Reiner Hoffmann and Jeremy Waddington (eds): Trade Unions in Europe - Facing the Challenges. Brussels: ETUI Dlvik, Jon Erik and Torgeir Aarvaag Stokke (1998): Norway: The Revival of Centralised Concertation, in Ferner and Hyman (eds): Changing Industrial Relations in Europe. Oxford: Blackwell Dlvik, Jon Erik, Mona Brten, Frode Longva and Arild H. Steen (1997): Norwegian Labour Market Institutions and Regulations in Dlvik, Jon Erik and H. Arild Steen (eds): Making Solidarity Work. The Norwegian Labour Market Model in Transition. Oslo: Scandinavian University Press Edwards P. K. and Richard Hyman (1994): Strikes and industrial conflict: Peace in Europe? in Hyman, R. and A. Ferner (eds): New frontiers in European industrial relations. Oxford: Blackwell Grimsrud, Bjrne and Torgeir Aarvaag Stokke (1997): Collective bargaining and labour market flexibility in Norway. Paper prepared for an ILO project. Oslo: Fafo Nergaard, Kristine (1996): Organisasjonsgraden mlt gjennom AKU 2. Kvartal 1995. Oslo: Fafo Nergaard, Kristine (1997): Norway in Giuseppe Fajertag (ed): Collective Bargaining in Western Europe 1995-1996. Brussels: ETUI

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Nergaard, Kristine (1998): Tariffavtaledekningen mlt ved surveyunderskelser. Levekrsunderskelsen 1996. Oslo: Fafo NHO (1995): Nye driftsformer og tariffpolitikk, framtidens system for lnns- og arbeidsvilkr. Report from a working group NOU 1998:2: Om grunnlaget for inntektsoppgjrene 1998 (The Technical Calculating Committee on Income Settlement, Report No. 1 1998) Olsen, Karen M. and Hege Torp (eds) (1998): Fleksibilitet i norsk arbeidsliv. Oslo: ISF Reegrd, Stein (1996): Norway, in Giuseppe Fajertag (ed.): Collective Bargaining in Western Europe 1995-1996. Brussels: ETUI Stokke, Torgeir Aarvaag (1997): Labour Market Parties, Collective Bargaining and Dispute Resolution in Norway, in Josephine Browne (ed): The Role of the State in Industrial Relations. Dublin: Oak Tree Press Stokke, Torgeir Aarvaag (1998): Lnnsforhandlinger og konfliktlsning. Norge i et skandinavisk perspektiv. Oslo: Fafo (doctoral dissertation) Stokke, Torgeir Aarvaag (1999): Collective bargaining and state intervention in the Scandinavian countries, in TRANSFER - European review of labour and research, vol 5, no 1

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Industrial relations in Norway

This publication consists of two articles. The first is a reprint of the Norwegian chapter in Anthony Ferner & Richard Hymans Changing Industrial Relations in Europe (Blackwell Publishers 1998). In that article, the basic features of the Norwegian model are explained, and its evolution is traced from the early origin up till 1996. The second article is an updated version of a contribution to the ETUI publication Collective Bargaining in Western Europe 19971998 (European Trade Union Institute 1998). Focusing on the bargaining rounds in 1997 and 1998 and the prospects for 1999, it also reviews the level and structure of industrial conflict in Norway. Together, these articles should provide a thorough and up to date picture of industrial relations developments in Norway.

Institute for Applied Social Science P.O.Box 2947 Tyen N-0608 Oslo http://www.fafo.no/engelsk/

ISBN 82-7422--238-5 Order no. 925